Requested by: Ken Jacobus Attorney
On Behalf of: The Republican Party
Prepared by: Greg Granquist, Group Coordinator
Date Issued: February 27, 1997
Subject: Definition of contribution and reporting requirements for political parties
This is in response to your request for an advisory opinion. In your January 8, 1997 letter to the Commission, you identified four questions regarding the new campaign disclosure law for which the Republican Party of Alaska needed an immediate answer in order to prepare for a fundraising event scheduled for mid-February.
This advice addresses those four questions. Your also asked two other questions, regarding the party's status as a corporate entity, and the reporting status of the Republican National Committee. Staff will address those questions in a separate letter in the near future.
In the context of AS 15.13, and its requirements and limitations governing campaign contributions, you ask
Question 1: Is a payment to a political party a contribution if the party has not identified a candidate or a ballot issue?
Question 2: Is a payment to a political party a contribution if the payment is made in connection with an expense such as a luncheon meeting?
Question 3: Is a payment to attend the Republican Party of Alaska's annual Lincoln day dinner a contribution if the funds are used only for the cost of the event and other operational costs of the party? If the payment is a contribution, may the costs of the event be deducted in calculating the amount of the contribution? If all or part of the payment is not a reportable contribution, may that portion be paid for with corporate funds?
Question 4: May you pay for tickets to the party's Lincoln Day Dinner with a check from your professional corporation or a small business corporation in which you are the 100% owner?
Answer to Question 1
Under the current statute and regulations, a payment to a political party is always considered a contribution regardless of the timing of the contribution in connection with a specific campaign. It matters not whether the party has chosen a current slate of candidates, is building a war chest for as yet unknown candidates, or is simply raising funds for day-to-day operations.
Answer to Question 2
Under the current statute and regulations, a payment to a political party is a contribution even if the payment is made in connection with a seemingly "non-campaign related" event such as a luncheon meeting.
Basis for Answer ( to Questions 1 and 2)
The primary function of political parties is to further political agendas by electing candidates. For this reason, the Commission has always viewed a payment to a political party as a contribution; ultimately the payment is intended to influence the outcome of an election. AS 15.13.400(5) further supports this conclusion defining "expenditure" to include "any payment made for use by a political party."
Consistent with this policy, the Commission has, over the years, required that political parties report transactions made in connection with such events as inaugural balls, luncheons, and annual district and statewide conventions. The Commission views a failure to report such information as a serious violation, and has assessed significant penalties when such activities were not reported correctly or promptly.
Answer to Question 3
The full purchase price of a ticket to a fundraising event is reportable as the amount of the contribution. As a result, the full ticket price amount is used in determining when the contributor reaches his or her contribution limit.
The costs of a fundraising event are reported by the event's sponsor as expenditures. Donated goods and services, such as food and prizes, are viewed as reportable contributions.
Basis for Answer to Question 3
Under current administrative regulation 2AAC 50.313(f), a "contribution" includes "the entire amount paid to attend or participate in a fund-raiser or other political event, and the entire amount paid as the purchase price for a fundraising item sold by a group or candidate."
The Commission's experience in administering the disclosure law reveals there are several practical reasons that the net received from a fundraising event is not factored in when calculating a ticket purchaser's contribution:
In the case of most garage sales and auctions, extensive recalculations would be necessary to determine each contributor's net contribution. In many cases, the results would be confusing because many contributors would not end with a positive net contribution.
For some fund-raising events, the costs of the event might exceed the receipts, in which case all contributors would make negative contributions.
In some games of chance, contributors with winning tickets win more than they contribute.
Answer to Question 4
You may not pay for tickets to the party's Lincoln Day Dinner with a check from your professional corporation or a small business corporation in which you are the 100% owner.
Basis for Answer to Question 4
The Lincoln Day Dinner is a fund-raising event held by a political party, the Republican Party of Alaska. The purchase of a ticket to the Lincoln Day fundraising dinner is a contribution to a political party. Under AS 15.13.065(a), only an individual [defined in AS 15.13.400 (8)] or a group [defined in AS 15.13.400(5)] may contribute to a political party. The corporations you mention are, by definition, neither an individual or a group and thus may not contribute to a political party.
The Commission approved this advisory opinion on February 27, 1997. The advice in this opinion applies only to the specific activity for which the advice was requested.
A copy of the original letter requesting the above advisory opinion is available upon request at the Alaska Public Offices Commission. (907) 276-4176.